Retirement in Italy

Did you know that if you retire to Italy you may benefit from a tax advantage?

Italy, besides being one of the most beautiful and enjoyable places to live, offers good tax breaks and amazing opportunities for individuals who decide to set up home in particular Regions of the South of Italy and spend their retirement in Italy.

Citizens who receive a foreign pension and decide to move to Italy and become tax resident in certain small towns of Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo Molise or Puglia, will pay a substitute tax rate of 7%  on all types of foreign income instead of higher ordinary personal income tax for a period of 9 years.  There is a possibility to exclude income produced in one or more countries if the conventions with these countries offer a more favourable condition.

New incomers shouldn’t have been resident in Italy during the previous 5 years.

During the period of this tax scheme, citizens will not have to fill an Italian form for tax monitoring (RW), will not have to pay tax on foreign real estate (IVIE) and on foreign financial investment or capital gains held abroad (IVAFE).

For tax purposes, it is compulsory that the first Italian income tax return evidences residence outside of Italy for the previous 5-year period and the State providing pensions, the amount of which is taxable at 7%.

In case of a change of mind, tax benefits for the previous years are not lost.

Very beautiful places are included in these Regions where it is possible to appreciate the sun, nature, Italian culture, the landscapes, healthy food and the particular Italian regional cuisine.

If you are considering retiring to Italy, you may need a more in-depth consultation with one of our experts. Please feel free to contact us.